Obama: Permanently Disabled Student Loan Forgiveness

Those deemed permanently disabled by the Social Security Administration (SSA) are entitled to Social Security Disability Insurance (SSDI) benefits, assuming they worked for a time prior to the onset of their disability.

They are also, unlike almost every other former student, entitled to student loan debt forgiveness. However, very few took advantage of this, despite the fact that many struggle to meet the basic needs of themselves and their families.

Now, the Obama administration is making a point to root out and identify those who have this been designated totally and permanently disabled and forgive their student loans – a total of $7.7 billion in federal student loans.

It was only four years ago that the administration took the initiative to make student loan forgiveness for disabled borrowers to make the process easier by allowing them to use their SSDI designation. People go through a rigorous process just to be deemed disabled and receive SSDI benefits. The thinking was if people met this designation, they shouldn’t have to endure yet a second – and unnecessary – rigorous process to reach the very same conclusion for purposes of student loan forgiveness.

But even after the administration did this, very few people took advantage. In all likelihood, these are individuals who are grappling with so much hardship as it is, they had not taken the extra steps necessary to seek student loan forgiveness.

Education Under Secretary Ted Mitchell explained huge numbers of eligible borrowers were “falling through the cracks” because they didn’t know they were eligible for it.

Mitchell underscored that these individuals have a right to relief of their student loan debts, and government has a responsibility to make it easier – not tougher – for them to obtain the benefits they are due.

Administrators are combing through SSDI roles identifying those individuals who have received the classification of “Medical Improvement Not Expected.” Just in its first review, the agency found approximately 390,000 people who were eligible for federal student loan relief. Of those, about 180,000 of them were in default in paying those loans back – which mean they are at-risk of losing their tax refund and also having their SSDI benefits garnished.

As our SSDI lawyers know, people who receive SSDI need these benefits to survive. Despite the way some media outlets characterize beneficiaries, no one is getting rich of these benefits. They are critical for beneficiaries and their families to meet their most basic needs. To threaten them with garnishment of those benefits for something they should not longer be responsible to pay is deeply troubling.

Starting soon, beneficiaries who are identified in the search will receive a letter from the government that will outline the steps they need to take in order to seek student loan discharge. They will be informed that they won’t need to submit additional documentation for student loan discharge – unlike those who would be applying without the SSDI designation.

These letters will be sent out over the course of a four-month period. After 120 days have passed, a second round of letters will be sent out. These letters will let borrowers know of the potential tax implications.

If you or a loved one is seeking Social Security Disability Insurance in Boston, call for a free and confidential appointment at 1-888-367-2900.